BAKU, Azerbaijan, March 18
By Leman Zeynalova – Trend:
A reduction in global oil demand over the medium term is crucial to reaching net-zero emissions ambitions, but formidable challenges lie ahead, Trend reports with reference to the International Energy Agency (IEA).
For a start, the transport sector, which makes up roughly 60 percent of total consumption, will have to lower its dependence on oil for overall demand to decline. Buildings and industry as well as the power and petrochemicals sectors must also burn less oil. Efficiency gains and energy substitution will also be critical.
However, current government policies and industry plans show that energy transition initiatives will have only a marginal impact on oil demand over the next six years. This report forecasts a steady rise in liquid fuel demand over the medium term, and by 2025 it will be 3.5 mb/d above the 2019 level. By comparison, in the World Energy Outlook (WEO) 2020 Sustainable Development Scenario (SDS), which maps out a trajectory consistent with global net-zero emissions by 2070, oil demand falls by 3 mb/d over the same period. A pathway to net-zero emissions globally by 2050 would require even sharper falls.
Leading the world on net-zero emissions policy is the European Union, which has a 55 percent GHG reduction target for 2030 versus 1990. Legislative details, to be revealed in June 2021, will likely focus on power and buildings in the next 10 years as strong legislation of vehicle CO2 emissions already exists through 2030. Transport and industry decarbonisation will accelerate post-2030. To achieve this transition, the European Union will use higher carbon prices as well as tougher policies supporting renewable development and energy efficiency.
China’s President Xi announced last year a goal of carbon neutrality before 2060, and subsequently a target of peak CO2 emissions before 2030. The government will take this into account in preparing its 14th five-year plan that will be ready later this year. Other Asian nations such as South Korea and Japan have also announced carbon neutrality by 2050.
Importantly, the United States officially re-joined the Paris Agreement in mid-February after a four-year absence and unveiled aggressive measures to tackle climate change. US President Biden has pledged to decarbonise the power grid by 2035 and achieve net-zero greenhouse gas emissions by 2050. Executive Orders have also been signed to halt construction of the Keystone XL pipeline and to temporarily ban oil and gas leasing on federal land.
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